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Cell Aquaculture Limited ACN 091 687 740 (Subject to a Deed of Company Arrangement)

NOTICE OF GENERAL MEETING AND EXPLANATORY STATEMENT

General Meeting to be held at Price Sierakowski Corporate Level 24, 44 St Georges Terrace, Perth, Western Australia on 18 June 2013 commencing at 10.00am (WST).

Important Notice

The Administrators (including in their capacity as Deed Administrators) have not independently verified any of the information contained in this Notice of Meeting. Neither the Administrators or their servants, agents or employees make any representation or warranty (express or implied) as to the accuracy, reasonableness or completeness of the information contained in this Notice of Meeting. To the extent permissible by law, all such parties and entities expressly disclaim any and all liability for, or based on or relating to, any such information contained in, or errors in or omissions from this Notice of Meeting and accompanying Explanatory Statement. Notwithstanding this, the Administrators consent to convene the General Meeting and the issue and dispatch of this Notice of Meeting and accompanying Explanatory Statement.

This Notice of General Meeting and Explanatory Statement should be read in its entirety. If Shareholders are in doubt as to how to vote, they should seek advice from their accountant, solicitor or other professional adviser without delay.

Recapitalisation Proposal of Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement)

General Information

This Notice of Meeting and Explanatory Statement provides information and seeks approval for the recapitalisation of the Company in accordance with the Recapitalisation Proposal.

Completion of the Recapitalisation Proposal will result in:

(a) the restructure of the Company’s capital base;
(b) the raising of funds for the working capital of the Company;
(c) termination of the Deed of Company Arrangement and retirement of the Deed Administrators;
(d) forgiveness of the Claims of the Creditors; and
(e) application for reinstatement to the ASX.

Further details of the Recapitalisation Proposal are provided in Section 2 of the Explanatory Statement. A short explanation of each Resolution to be considered at the General Meeting is set out in Section 3 of the Explanatory Statement. Definitions of capitalised terms used in this Notice of Meeting and Explanatory Statement are set out in Section 6 of the Explanatory Statement.

In considering the Resolutions, Shareholders must bear in mind the current financial circumstances of the Company.

If the Resolutions are passed and the Recapitalisation Proposal is completed, the Company will be in a position to seek re-instatement of its securities on the ASX. This re-quotation will be subject to compliance with ASX and Corporations Act regulatory requirements.

If Shareholders reject the Recapitalisation Proposal, it is probable that the Company will proceed into liquidation. In those circumstances, it is unlikely that there will be any return to Shareholders.

The Resolutions are therefore important and affect the future of your Company. You are urged to give careful consideration to the Notice of Meeting and the contents of the Explanatory Statement.

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NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Shareholders of Cell Aquaculture Limited will be held at Price Sierakowski Corporate Level 24, 44 St Georges Terrace, Perth, Western Australia on 18 June 2013, commencing at 10.00am (WST).

SPECIAL BUSINESS

1. Consolidation of Capital

To consider and if thought fit, pass the following resolution as an ordinary resolution :

“That subject to Resolutions 2 to 6 (inclusive) being passed and in accordance with section 254H of the Corporations Act, Listing Rule 7.20, the Company Constitution and for all other purposes, approval be and is hereby given that the Existing Shares in the Company be consolidated on a 1 for 10 basis, with any fractional entitlements being rounded down.

The consolidation of existing shares will take place on the date which is 5 business days after this resolution is passed by shareholders a general meeting of the Company.”

2. Reduction of Capital

To propose and, if thought fit, to pass the following resolution as an ordinary resolution :

“That, subject to Resolutions 1 and 3 to 6 (inclusive) being passed and in accordance with sections 256B, 256C and 258F of the Corporations Act and for all other purposes, approval be and is hereby given to the capital of the Company being reduced by applying an amount of up to $19,872,740 being a proportion of the accumulated losses of the Company, against the share capital which is considered permanently lost.”

3. Issue of New Shares to Trident and its Nominees

To consider and if thought fit, to pass the following resolution as an ordinary resolution :

“That subject to Resolutions 1 and 2 and 4 to 6 (inclusive) being passed, and in accordance with Listing Rule 10.11 and section 208(1) of the Corporations Act, and for all other purposes, approval be and is hereby given, to the issue of:

(a) 16,000,000 New Shares to Trident Capital (as an Exempt Investor) (and/or its nominees);
(b) 2,000,000 New Shares to KC Ong (as an Exempt Investor) (and/or his nominees); and
(c) 2,000,000 New Shares to Richard Soo (as an Exempt Investor) (and/or his nominees),

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at an issue price of 0.5 cents per share to raise $100,000 on the terms and conditions set out in the accompanying explanatory statement.”

4. Issue of New Shares to Non-Related Parties

To consider, if thought fit, to pass the following resolution as an ordinary resolution :

“That subject to Resolutions 1 to 3 (inclusive) and 5 and 6 (inclusive) being passed and in accordance with Listing Rule 7.1, and for other purposes, approval be and is hereby given to the issue of:

(a) 12,000,000 New Shares to John Clinton (as an Exempt Investor) (and/or his nominee);
(b) 4,000,000 New Shares to Teo Family (as an Exempt Investor) (and/or its nominee);
(c) 10,000,000 New Shares to RZ Capital Pte Ltd (as an Exempt Investor) (and/or its nominee);
(d) 10,000,000 New Shares to Precise Network Limited (as an Exempt Investor) (and/or its nominee);
(e) 4,000,000 New Shares to Peng Jin (as an Exempt Investor) (and/or his nominee);
(f) 2,000,000 New Shares to Bai Zhi Yuan (as an Exempt Investor) (and/or his nominee);
(g) 2,000,000 New Shares to Wang Min Jian (as an Exempt Investor) (and/or his nominee);
(h) 12,000,000 New Shares to Chen Fei (as an Exempt Investor) (and/or his nominee);
(i) 10,000,000 New Shares to Chan Ho Yin (as an Exempt Investor) (and/or his nominee;
(j) 12,000,000 New Shares to Chen Ying Hua (as an Exempt Investor) (and/or his nominee); and
(k) 2,000,000 New Shares to Ang Siok Kooi (as an Exempt Investor) (and/or his nominee),

at an issue price of 0.5 cents per share to raise $400,000 on the terms and conditions set out in the accompanying explanatory statement.”

5. Issue of New Shares under the Prospectus

To propose and, if thought fit, to pass the following resolution as an ordinary resolution :

“That subject to Resolutions 1 to 4 (inclusive) and 6 being passed, and in accordance with Listing Rule 7.1 and for all other purposes, approval be and is hereby given to the issue of between 200,000,000 and 250,000,000 New

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Shares under the Prospectus at an issue price of 1 cent per share to raise between $2,000,000 and $2,500,000.”

6. Right to apply under the Prospectus by New Directors

To propose and, if thought fit, to pass the following resolution as an ordinary resolution :

“That, subject to Resolutions 1 to 5 (inclusive) being passed, in accordance with section 208 of the Corporations Act, Listing Rule 10.11 and for all other purposes, approval be and is hereby given to allow the Company to issue up to:

(a) 2,000,000 New Shares to Paul Price (and/or his nominee);
(b) 2,000,000 New Shares to Richard Soo (and/or his nominee); and
(c) 2,000,000 New Shares to KC Ong (and/or his nominee),

under the Prospectus.”

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Voting exclusion statement

The following voting exclusion statement applies to the Resolutions under the Listing Rules in relation to the following persons (“ Excluded Persons ”). The Company will disregard any votes on the following Resolutions cast by the following Excluded Persons:

Resolution Number	Title	Excluded Persons

3	Issue of New Shares to Trident and its Nominees	 Trident Capital Pty Ltd and any of its Associates.  Richard Soo and KC Ong, or their Nominees and any of their Associates.  A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 3 is passed, and any of their Associates.
4	Issue of New Shares to Non- Related Parties	 The Non-Related Parties and any of their Associates.  A person who might obtain a benefit, accept a benefit solely in the capacity of a hold of ordinary securities, if Resolution 4 is passed, and any of their Associates.
5	Issue of New Shares under the Prospectus	 Any person who may participate in the proposed issue of New Shares under the Prospectus, and any of their Associates.  A person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 5 is passed, and any of their Associates.
6	Right to apply under the Prospectus by New Directors	 The New Directors or their nominees and any of their Associates.

However the Company need not disregard a vote if it is cast by:

(a) a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(b) the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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Explanatory Statement

The accompanying Explanatory Statement forms part of this Notice of General Meeting and should be read in conjunction with it.

All resolutions are subject to and conditional on each other Resolution being passed. Accordingly, the resolutions should be considered collectively as well as individually.

Shareholders are specifically referred to Section 6 of the Explanatory Statement which contains definitions of capitalised terms used in this Notice of Meeting and the Explanatory Statement.

Proxies

Please note that:

(a) a Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company;
(c) a Shareholder may appoint a body corporate or an individual as its proxy;
(d) a body corporate appointed as a Shareholder’s proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder’s proxy; and
(e) Shareholders entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed proxy form provides further details on appointing proxies and lodging proxy forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company or its share registry in advance of the General Meeting or handed in at the General Meeting when registering as a corporate representative.

Voting Entitlements

In accordance with Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001, the Company has determined that a person’s entitlement to vote at the General Meeting will be the entitlement of that person set out in the register of Shareholders as at 5.00pm (WST) on Thursday, 13 June 2013. Accordingly, transactions registered after that time will be disregarded in determining Shareholder’s entitlement to attend and vote at the General Meeting.

By Order of the Board of Directors

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KC Ong Director Cell Aquaculture Limited ACN 091 687 740 17 May 2013

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Explanatory Statement to Shareholders

Proposal for the Recapitalisation of Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement)

IMPORTANT NOTICE

Shareholders should read this Explanatory Statement in full and if they have any questions, obtain professional advice before making any decisions in relation to the Resolutions to be put to Shareholders at the General Meeting.

This Explanatory Statement includes information and statements that are both historical and forward-looking. To the extent that any statements relate to future matters, Shareholders should consider that they are subject to risks and uncertainties. Those risks and uncertainties include factors and risks specific to the Company as well as matters such as general economic conditions. Actual events or results may differ materially. Neither the Company, its directors or their advisors can assure Shareholders that any forecast or implied results will be achieved.

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	PAGE NO.
1	INTRODUCTION ............................................................................................. 10
2	THE RECAPITALISATION PROPOSAL .......................................................... 10
3	GENERAL MEETING ...................................................................................... 19
4	OTHER INFORMATION .................................................................................. 24
5	REGULATORY REQUIREMENTS .................................................................. 29
6	DEFINITIONS ................................................................................................. 38

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Explanatory Statement

1 INTRODUCTION

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Company’s General Meeting.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the resolutions in the accompanying Notice of General Meeting.

This Explanatory Statement should be read in conjunction with the Notice of General Meeting. Capitalised terms in this Explanatory Statement are defined in Section 6.

2 THE RECAPITALISATION PROPOSAL

2.1 Background

On 1 October 2012, the securities of the Company were suspended from official quotation on the Official list of the ASX at the request of the Company.

On 19 November 2012, by resolution of the directors of the Company pursuant to section 436A of the Corporations Act, Christopher Williamson and David Hurt were appointed as the administrators of the Company (“ Administrators ”).

On or about 4 December 2012, Trident Capital Pty Ltd made a proposal to reconstruct and recapitalise the Company substantially on the terms of the Recapitalisation Proposal.

Pursuant to the resolution at a meeting of Creditors on 15 February 2013 held under section 439A of the Corporations Act, the Creditors resolved pursuant to section 439C of the Corporations Act that the Company enter into a Deed of Company Arrangement. On or about 26 February 2013, the Company, the Administrators and Trident Capital executed the DOCA and the Administrators became the administrators of the DOCA (“ the Deed Administrators ”).

2.2 Principal features of the Recapitalisation Proposal

The principal features of the Recapitalisation Proposal are as follows:

(a) Capital Consolidation : Consolidation of the existing issued capital of the Company on a 1 for 10 basis (see Resolution 1 and Section 3.3).
(b) Reduction of capital : Reduce the capital of the Company by applying an amount of up to $19,872,740 being a proportion of the accumulated losses of the Company, against the share capital of the Company which is considered permanently lost (see Resolution 2 and Section 3.4).
(c) Issue of New Shares to Trident, Ong and Soo and their Nominees : The Company will issue:

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(i) 16,000,000 New Shares to Trident Capital (as an Exempt Investor) (and/or its nominees);
(ii) 2,000,000 New Shares to KC Ong (as an Exempt Investor) (and/or his nominees); and
(iii) 2,000,000 New Shares to Richard Soo (as an Exempt Investor) (and/or his nominees);

at an issue price of 0.5 cents per share to raise $100,000 (see Resolution 4 and Section 3.5.

(d) Issue of New Shares to Non-Related Parties : The Company will issue a total of 80,000,000 New Shares to the following parties:
(i) 12,000,000 New Shares to John Clinton (as an Exempt Investor) (and/or his nominee);
(ii) 4,000,000 New Shares to Teo Family (as an Exempt Investor) (and/or its nominee);
(iii) 10,000,000 New Shares to RZ Capital Pte Ltd (as an Exempt Investor) (and/or its nominee);
(iv) 10,000,000 New Shares to Precise Network Limited (as an Exempt Investor) (and/or its nominee);
(v) 4,000,000 New Shares to Peng Jin (as an Exempt Investor) (and/or his nominee);
(vi) 2,000,000 New Shares to Bai Zhi Yuan (as an Exempt Investor) (and/or his nominee);
(vii) 2,000,000 New Shares to Wang Min Jian (as an Exempt Investor) (and/or his nominee);
(viii) 12,000,000 New Shares to Chen Fei (as an Exempt Investor) (and/or his nominee);
(ix) 10,000,000 New Shares to Chan Ho Yin (as an Exempt Investor) (and/or his nominee;
(x) 12,000,000 New Shares to Chen Ying Hua (as an Exempt Investor) (and/or his nominee); and
(xi) 2,000,000 New Shares to Ang Siok Kooi (as an Exempt Investor) (and/or his nominee),

at an issue price of 0.5 cents per share to raise $400,000 (see Resolution 4 and Section 3.6.

(e) Issue of New Shares under the Prospectus : The Company will issue up to 250,000,000 New Shares under the Prospectus at a price of 1 cent per share to raise up to $2,500,000 (see Resolution 5 and Section 3.7).

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(f) Appointment of New Directors : Three new directors of the Company have been appointed to join the two continuing directors, and the company secretary has also been replaced (see Section 4.10).
(g) Right to apply under the Prospectus by New Directors : the issue of New Shares as follows:
(i) up to 2,000,000 New Shares to Paul Price (and/or his nominee);
(ii) up to 2,000,000 New Shares to Richard Soo (and/or his nominee); and
(iii) up to 2,000,000 New Shares to KC Ong (and/or his nominee),

under the Prospectus to be issued by the Company (see Resolution 7 and Section 3.8).

(h) Payment to the Deed Administrator : Under the terms of the DOCA, a total of $600,000 is to be transferred to the deed administrators to be applied to the Creditors Trust (See Sections 4.2).
(i) Forgiveness of claims : Under the terms of DOCA, all existing Claims against the Company will be released, extinguished and barred, with Creditor’s Claims only able to be met from the Creditors Trust in accordance with the terms of the DOCA and the Creditor’s Trust Deed (see Sections 4.2 and 4.3).

2.3 Purpose of the Recapitalisation Proposal

The purpose of the Recapitalisation Proposal is to:

(a) restructure the Company’s issued capital and net asset base;
(b) provide working capital to finalise and complete the Recapitalisation and terminate the DOCA;
(c) allow the Company to continue its existing activities and pursue new projects by way of acquisition or investment; and
(d) facilitate the reinstatement of the Company’s Shares on the ASX.

The operational and expenditure plans of the Company are summarised in Section 2.5.

2.4 Indicative timetable

Set out in the table below is the expected timing for completion of the Recapitalisation Proposal, noting that the Company’s Shares are currently suspended, and that the timetable is subject to compliance with all regulatory requirements. These dates are indicative only and may be varied without prior notice.

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	2013
Creditors’ Meeting	15 February 2013
ASX Submission	22 February 2013
Execution of DOCA/Creditors Trust created	26 February 2013
ASX Approval	26 April 2013
Payment of $30,000 non-refundable deposit	29 April 2013
DOCA fully effectuated	29 April 2013
Dispatch of Notice of Shareholder Meeting	17 May 2013
Shareholders Meeting	18 June 2013
Record Date for Consolidation of Capital	27 June 2013
Issue of 100 million shares @ $0.05 per share	27 June 2013
Payment of $200,000 to Creditor’s Trust	27 June 2013
Lodgement of Prospectus with ASIC	18 June 2013
Prospectus offer opens	26 June 2013
Prospectus offer closes	26 July 2013
Allotment of all Shares	2 August 2013
Final payment of $370,000 to the Creditor’s Trust	2 August 2013
Commencement of trading of Shares on ASX	9 August 2013

2.5 Operational and expenditure plans of the Company

The Company proposes to raise sufficient working capital to complete the Recapitalisation Proposal and to continue to expand the activities of the Company. As part of the working capital budget, the Company may pursue new projects by way of acquisition or investment.

(a) Capital raising

The capital raising of up to $3,000,000 (before costs) contemplated by the Resolutions contained in the Notice of Meeting will enable the recapitalisation of the Company to be completed and enable the Company to meet its initial operational and expenditure plans. On successful completion of the capital raising, the Company will make an application to ASX for its Shares to be re-quoted on the Official List.

The purpose of the capital raising is to:

(i) meet the administration costs of the Company and the expenses of the Recapitalisation Proposal including payments for the benefit of Creditors under the DOCA;
(ii) fund the Company’s ongoing operations; and
(iii) provide funds for the identification, examination and possible acquisition and development of new investments, as identified by the Company.

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(b) Expenditure plans and use of funds

The Company’s expenditure plans are the best estimates available to the Company at this time. It is important to recognise that although certain parts of the budget allocations are committed expenditures, work programs are subject to changes in line with emerging results, circumstances and opportunities.

Please see Section 4.4 for more information regarding the future investment opportunities available to the Company.

It is proposed that the funds raised under the capital raising will be applied as follows:

Use of funds – Expenditure Budget	Year 1	Year 2
*Total funds available at ASX Reinstatement	1,100,000	820,000
Utilised as follows:
Review and evaluation of new business opportunities in the aquaculture sector	250,000	250,000
General/Working Capital	200,000	600,000
Total funds utilised	450,000	850,000
End of year Cash at bank	$1,470,000	$620,000

Note :

Whilst the Company will be investing in its business, it will also be expecting to be generating revenues as well. The Expenditure Budget does not include those revenues.

The total funds available at ASX Reinstatement is the net amount after accounting for capital raising funds raised ($3,000,000) – payment to the Deed Administrators in accordance with the DOCA ($600,000) – Expenses associated with the recapitalisation Proposal ($480,000).

2.6 Pro forma capital structure

The pro forma capital structure of the Company on completion of the Recapitalisation Proposal is as follows:

Description	Number of Shares	% Share interest


Pre-Capital Consolidation
Existing Shares	241,154,294	100%

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Post-Capital Consolidation
1:10 Capital Consolidation (Note 1)	1	24,115,429	6.45%
Issue of New Shares to Trident, KC Ong and Richard Soo and their Nominees (Note 2)	3	20,000,000	5.35%
Issue of New Shares to Non- Related Parties (Note 3)	4	80,000,000	21.38%
Issue of New Shares under the Prospectus (Notes 4, 5)	5 7	250,000,000 (6,000,000 to New Directors)	66.82% (2.4% to New Directors)
TOTALS		374,115,429	100%

Notes

Please refer to the commentary in Section 3.3.
Please refer to the commentary in Section 3.5.
Please refer to the commentary in Section 3.6.
Please refer to the commentary in Section 3.7.
Each New Director may subscribe for up to 2,000,000 New Shares out of the 250,000,000 Shares to be issued under the Prospectus as follows (please see Section 3.8 for more information):

New Director	Resolution	Maximum number of Shares entitled to under Prospectus	Maximum % of Shares entitled to under Prospectus


Paul Price	6	2,000,000	0.5%
Richard Soo	6	2,000,000	0.5%
KC Ong	6	2,000,000	0.5%

2.7 Quotation of New Shares on ASX

The Company is already admitted to the Official List. However, trading in the Company’s Shares was suspended on 1 October 2012. Following completion of the Recapitalisation Proposal, the Company will apply to ASX for requotation of the Company’s Shares.

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Reinstatement to the Official List is at the discretion of ASX and will be subject to compliance with ASX and Corporations Act regulatory requirements. At the date of this Explanatory Statement, ASX has indicated to the Company that on the basis of the information provided to ASX, the Recapitalisation Proposal will not adversely affect the Company’s ability of being re-admitted to the Official List.

2.8 Pro forma Statement of Financial Position

Included below is the pro forma Statement of Financial Position for the Company, assuming completion of the Recapitalisation Proposal. The pro forma Statement of Financial Position has been prepared based on the book value of the Company’s net assets at 30 June 2012 and adjusted for the Recapitalisation Proposal.



	Note	Unaudited as at 30 June 2012 ($)


Assets Current Cash and Cash Equivalents Trade and other receivables Inventories Biological Assets Total Current Assets Non Current Assets Receivables Property, plant and equipment Total Fixed Assets 1 29,674 123,971 257,173 10,621 421,439 - 323,411 323,411 1,920,000 - 257,173 10,621 2,187,794 - - 323,411 323,411
Total Assets 744,850 2,511,205

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	Note	Unaudited as at 30 June 2012 ($)


Current Liabilities Trade and Other Payables Borrowings Derivative financial instrument Total Current Liabilities Non Current Liabilities Non Currents Liabilities Total Non-Current Liabilities 486,978 721,607 - 1,208,585 - - - - - - - - Total Liabilities 1,208,585 NIL Net Assets/(Liabilities) (463,735) 2,511,205 Shares on issue 2 241,154,294 374,115,429 Value of a Share ($0.0019) $0.0067

Notes

1. Cash and Cash Equivalents

Cash and cash equivalents have been adjusted for the expected changes that will result from the recapitalisation of the Company. These adjustments are set out below:

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Description	Amount
Cash at 30 June 2012 $29,674 Cash received from issue of New Shares under the Prospectus $2,500,000 Cash received from issue of New Shares to Trident, KC Ong and Richard Soo and their Nominees $100,000 Cash received from the issue of New Shares to Non- Related Parties $400,000 Payments to Deed Administrators under DOCA ($600,000) Realisations by Voluntary Administrators ($29,674) Expenses associated with the Recapitalisation Proposal ($480,000) Cash post Recapitalisation Proposal $1,920,000

Description

Amount

Cash at 30 June 2012
$29,674
Cash received from issue of New Shares under the
Prospectus
$2,500,000
Cash received from issue of New Shares to Trident,
KC Ong and Richard Soo and their Nominees
$100,000
Cash received from the issue of New Shares to Non-
Related Parties
$400,000
Payments to Deed Administrators under DOCA
($600,000)
Realisations by Voluntary Administrators
($29,674)
Expenses associated with the Recapitalisation
Proposal
($480,000)
Cash post Recapitalisation Proposal
$1,920,000

2. Shares on issue

Description	Number of Shares
Existing Shares on issue 241,154,294
Shares on issue following Capital Consolidation 24,115,429 Shares issued to Trident, KC Ong and Richard Soo and their Nominees 20,000,000 Shares issued to Non-Related parties 80,000,000 Shares issued under the prospectus 250,000,000 Total Shares on issue 374,115,429

2.9 Forgiveness of Creditors’ Claims

If the Recapitalisation Proposal is approved, the provision for the Deed Administrators’ fees and Creditors’ Claims will be settled by the payment of money from the Creditors Trust to the Deed Administrators in full satisfaction of all Creditors’ Claims (please see Section 4.2 for more information). The Deed Administrators will transfer these moneys to the Trust Fund in accordance with the terms of the DOCA and the Claims of the Creditors against the Company will be extinguished, discharged and released.

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3 GENERAL MEETING

3.1 Action to be Taken by the Existing Shareholders

In order to proceed with the Recapitalisation Proposal, the Company must convene a General Meeting of Existing Shareholders for the purposes of passing the Resolutions in compliance with the requirements of the Listing Rules and the Corporations Act.

The Notice of Meeting convening the General Meeting is included at the front of this booklet. Existing Shareholders are encouraged to attend and vote in favour of each of the Resolutions to be put at the General Meeting.

If an Existing Shareholder is not able to attend and vote at the General Meeting, the Existing Shareholder is encouraged to complete the proxy form at the back of this booklet and return it to the Company at the address stated on the proxy form not later than 48 hours before the time specified for the commencement of the General Meeting.

3.2 General Meeting Resolutions

There are 6 resolutions to be put to the General Meeting, all of which are ordinary resolutions.

Each Resolution relates to the implementation of the Recapitalisation Proposal and is conditional on the passing of each of the other Resolutions, so that the Resolutions will not have any effect unless all of the Resolutions are passed. Accordingly, Shareholders should consider each Resolution collectively as well as individually.

Certain voting restrictions are imposed in relation to some of the Resolutions as detailed in the accompanying Notice of Meeting under the heading “Voting exclusion statement”.

This Section 3 sets out a brief explanation of each resolution.

3.3 Resolution 1 – Capital Consolidation

Resolution 1 is an ordinary resolution and seeks Shareholder approval that the issued capital of the Company be altered by consolidating existing shares on a 1 to 10 basis.

Resolution 1 requires shareholders approval under Section 254H of the Corporations Act and Listing Rule 7.20 of the ASX Listing Rules. For more information on this, please refer to Section 5.1.

The Capital Consolidation will not result in any change to the substantive rights and obligations of Existing Shareholders. The purpose of the capital consolidation of the existing capital of the Company is to reduce the number of existing shares on issue.

The Company does not have any options to acquire shares on issue.

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The Company’s balance sheet and tax position will remain unchanged as a result of the Capital Consolidation. However, the Company’s issued capital as a result of the capital consolidation will be as follows:

(a) Shares

At the date of this explanatory statement, the Company has 241,154,294 shares on issue. The capital consolidation on a 1 to 10 basis will reduce the number of shares on issue to 24,115,429.

(b) Timetable for Capital Consolidation

Event	Date
Company announces Capital Consolidation and dispatches Notice of Meeting	17 May 2013
Company notifies ASX that Shareholders have approved the Capital Consolidation	18 June 2013
Trading in the re-organised securities would normally commence on a deferred settlement basis (Note 1)	21 June 2013
Last day for the Company to register transfers on a pre- Capital Consolidation basis (Note 2)	27 June 2013
Securities registered on a post-Capital Consolidation basis	28 June 2013
Dispatch of new holding statements for consolidated securities	4 July 2013

The above dates are indicative only and are subject to change.

Notes

Trading in the consolidated Shares on a deferred settlement basis will not occur as the Company will still be suspended from quotation on the Official List.
As per Note 1, the Company’s securities will not be able to be traded prior to the General Meeting as the Company will still be suspended from quotation.

3.4 Resolution 2 – Reduction of capital

Resolution 2 is an ordinary resolution and seeks Shareholder approval to reduce the capital of the Company by applying an amount of up to $19,872,740, being a proportion of the accumulated losses of the Company, against the share capital of the Company which is considered permanently lost. Resolution 2 requires Shareholder approval under Sections 256B, 256C and 258F of the Corporations Act. Please see Section 5.2 for more information in this regard.

The purpose of the reduction of capital is to reduce the amount of capital on issue where the value has been permanently lost or is not represented by

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available assets, provided that the Company does not cancel any Shares. The accumulated losses are comprised of those which relate to the Company’s assets that have been either sold or had their value impaired and the trading losses accumulated by the Company.

The Company proposes to effect the reduction of capital by debiting the Company’s capital account by the amount of the Company’s accumulated losses being up to approximately $19,872,740. Under this reduction of capital, the Company will not be returning any capital to Shareholders or cancelling any Shares. It will essentially be an accounting entry which will take immediate effect from the passing of the Resolutions.

The reduction of capital does not and will not materially prejudice the Company’s ability to pay the Creditors, has no direct impact on Shareholders (or their shareholding), is not selective between Shareholders and will not affect the number of fully paid shares on issue in the Company. The Company does not have any partly paid shares on issue which may be affected by the reduction of capital.

3.5 Resolution 3 – Issue of New Shares to Trident, Ong and Soo and their Nominees

Resolution 3 is an ordinary resolution and seeks Shareholder approval under Listing Rules 10.11, s208(1) of the Corporations Act for the issue of:

(a) 16,000,000 New Shares to Trident Capital (as an Exempt Investor) (and/or its nominees);
(b) 2,000,000 New Shares to KC Ong (as an Exempt Investor) (and/or his nominees);
(c) 2,000,000 New Shares to Richard Soo (as an Exempt Investor) (and/or his nominees),

at an issue price of 0.5 cents per share to raise $100,000.

The issue of New Shares to Trident and its Nominees is subject to Shareholders passing all Resolutions contained in the Notice of Meeting, compliance with ASX and ASIC regulatory requirements, as well as market factors at that point in time. Part of the funds raised from the issue of New Shares will be applied to:

(a) payment of the amount of $200,000 to the Deed Administrators in accordance with the DOCA (please see Section 4.2 for more information);
(b) satisfying the costs associated with the implementation of the Recapitalisation Proposal; and
(c) otherwise implementing the Company’s operational and expenditure plans outlined in Section 2.5.

Any New Shares issued to Trident, KC Ong and Richard Soo and their Nominees is to occur within 3 months of the General Meeting in accordance

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with the ASX Waiver (or such later time to the extent permitted by the ASX under any additional waiver of the Listing Rules).

All of the New Shares referred to in Resolution 3 will, upon being issued, rank equally in all respects with Existing Shares.

3.6 Resolution 4 – Issue of New Shares to Non-Related Parties

Resolution 4 is an ordinary resolution and seeks Shareholder approval for the issue of:

(a) 12,000,000 New Shares to John Clinton (as an Exempt Investor) (and/or his nominee);
(b) 4,000,000 New Shares to Teo Family (as an Exempt Investor) (and/or its nominee);
(c) 10,000,000 New Shares to RZ Capital Pte Ltd (as an Exempt Investor) (and/or its nominee);
(d) 10,000,000 New Shares to Precise Network Limited (as an Exempt Investor) (and/or its nominee);
(e) 4,000,000 New Shares to Peng Jin (as an Exempt Investor) (and/or his nominee);
(f) 2,000,000 New Shares to Bai Zhi Yuan (as an Exempt Investor) (and/or his nominee);
(g) 2,000,000 New Shares to Wang Min Jian (as an Exempt Investor) (and/or his nominee);
(h) 12,000,000 New Shares to Chen Fei (as an Exempt Investor) (and/or his nominee);
(i) 10,000,000 New Shares to Chan Ho Yin (as an Exempt Investor) (and/or his nominee;
(j) 12,000,000 New Shares to Chen Ying Hua (as an Exempt Investor) (and/or his nominee); and
(k) 2,000,000 New Shares to Ang Siok Kooi (as an Exempt Investor) (and/or his nominee),

at an issue price of 0.5 cents per share to raise $400,000 on the terms and conditions set out in the accompanying explanatory statement.

The issue of New Shares to Non-Related Parties is subject to Shareholders passing all Resolutions contained in the Notice of Meeting, compliance with ASX and ASIC regulatory requirements, as well as market factors at that point in time. Part of the funds raised from the issue of New Shares will be applied to:

(a) payment of the amount of $200,000 to the Deed Administrators in accordance with the DOCA (please see Section 4.2 for more information);

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(b) satisfying the costs associated with the implementation of the Recapitalisation Proposal; and
(c) otherwise implementing the Company’s operational and expenditure plans outlined in Section 2.5.

Any New Shares issued to Non-Related Parties is to occur within 3 months of the General Meeting (or such later date as permitted by an ASX Waiver or modification of the Listing Rules).

All of the New Shares referred to in Resolution 4 will, upon being issued, rank equally in all respects with Existing Shares.

3.7 Resolution 5 – Issue of New Shares under the Prospectus

Resolution 5 is an ordinary resolution and seeks Shareholder approval for the issue of up to 250,000,000 New Shares under the Prospectus at 1 cent per share to raise up to $2,500,000. Resolution 5 must be approved by Shareholders under Listing Rule 7.1. Please see Section 5.3 for more information in this regard.

The issue of New Shares under the Prospectus is subject to Shareholders passing all Resolutions contained in the Notice of Meeting, compliance with ASX and ASIC regulatory requirements, as well as market factors at that point in time. The funds raised from the issue of New Shares under the Prospectus (after associated costs) will be applied to:

(a) payment of the amount of $370,000 to the Deed Administrators in accordance with the DOCA (please see Section 4.2 for more information);
(b) satisfying the costs associated with the implementation of the Recapitalisation Proposal; and
(c) otherwise implementing the Company’s operational and expenditure plans outlined in Section 2.5.

All of the New Shares referred to in Resolution 5 will, upon being issued, rank equally in all respects with Existing Shares.

The Prospectus is expected to be issued on or about 18 June 2013 and it is intended that the Prospectus will close on or about 26 July 2013. However, these dates are indicative only and subject to change without further notice.

The issue of the New Shares under the Prospectus must occur no later than 3 months (or such later date as permitted by the Listing Rules) from the date of the General Meeting.

3.8 Resolution 6 – Right to apply under the Prospectus by the New Directors

Resolution 6 is an ordinary resolution and seeks Shareholder approval for the issue of up to 2,000,000 New Shares to the New Directors from the total shares available under Prospectus.

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The shares will be issued as follows:

(a) up to 2,000,000 New Shares to Paul Price (and/or his nominee);
(b) up to 2,000,000 New Shares to Richard Soo (and/or his nominee); and
(c) up to 2,000,000 New Shares to KC Ong (and/or his nominee),

at a price of 1 cent each under the Prospectus.

As the New Directors are Related Parties of the Company, Resolution 6 must be approved by Shareholders under section 208 of the Corporations Act and Listing Rule 10.11. Please see Sections 5.4 and 5.5 for more information in this regard.

Any New Shares allotted and issued to the New Directors under the Prospectus is to occur within 3 months of the General Meeting, in accordance with the ASX Waiver (or such later time to the extent permitted by the ASX under any additional waiver of the Listing Rules) and such New Shares will be issued on the same terms as the New Shares to be issued to Non-Related Parties under the Prospectus.

4 OTHER INFORMATION

4.1 Scope of disclosure

The Corporations Act requires that this Explanatory Statement set out all information which is known to the Company that is reasonably required by Shareholders to decide whether or not it is in the Company’s interests to pass the Resolutions.

The Company is not aware of any relevant information that is material to the decision of how to vote on the Resolutions other than as is disclosed in this Explanatory Statement or previously disclosed to Shareholders by the Deed Administrators or the Company by notification to ASX.

4.2 Deed of Company Arrangement

The DOCA approved by the Creditors provides for the following:

(a) The Deed Administrators are to establish the Creditors Trust for the benefit of the Deed Administrators and the Creditors, into which the following moneys are to be paid:
(i) $30,000 as an initial non-refundable deposit; and

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(ii) $200,000 after shareholder approval of the Company’s reconstruction and recapitalisation; and
(iii) $370,000 after the closing of the Public Offer.
(b) Upon the Deed Administrators establishing the Creditors Trust and notifying ASIC that the DOCA has been wholly effectuated, the DOCA will terminate and:
(i) the Creditors’ Claims against the Company are replaced with rights under the Creditors’ Trust Deed;
(ii) the Creditors accept their rights under the Creditors’ Trust Deed and will participate in the Trust Fund in full satisfaction of their Claims against the Company; and
(iii) the Company is released from the Claims of the Creditors.
(c) Upon the satisfaction of the DOCA, the Deed Administrators will:
(i) return control of the Company to the directors then in office; and
(ii) retire.
(d) In accordance with the Reconstruction Deed, the Company will pay the amounts to the Deed Administrators from the proceeds of issuing New Shares to Trident, KC Ong and Richard Soo and their Nominees, Non-Related Parties, and under the Prospectus.

4.3 Creditors’ Trust Deed

Upon the satisfaction of the DOCA, the Company and the Administrators as trustees of the Creditors Trust (“ Trustees ”) will enter into the Creditors’ Trust Deed.

The Creditors’ Trust Deed will provide for the following:

(a) The Trustees will hold the Creditors Trust monies and any income accruing on the assets of the Creditors Trust on trust for the Creditors on the terms of the Creditors’ Trust Deed.
(b) The Creditors’ Claims against the Company under the DOCA are converted to Claims to the Creditors Trust under the Creditors’ Trust Deed.
(c) The Trustees will distribute the Creditors Trust in order of priority set out in the DOCA.
(d) The Creditors must accept their entitlements under the Creditors’ Trust Deed in full satisfaction and discharge of their Claims against the Trustees or the Trust Fund.
(e) Upon payment of the final dividend to a Creditor:
(i) the Creditors’ Trust Deed will terminate; and

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(ii) the Trustees will resign.

4.4 Future Investments

Upon being reinstated to trading on the ASX, the Company will continue to exploit the EcoCell hatch to dispatch aquaculture production system.

The Company intends to nominate new board members who have the management skills to ensure that the Company will only expand in well understood markets.

The Company will carefully and extensively consider new projects having regard to the seafood demand, pricing, the capacity of local markets to purchase, and the extent of existing demand before committing to a joint venture or investment of capital.

Joint ventures where the Company’s contribution is limited to its intellectual property and its reward consists of license fees and royalties on production, will be sought and prioritised. World fish stocks are declining whilst consumer demand for seafood continues to rise. As a result, the Company believes the demand for aquaculture products will continue to grow.

4.5 Voting interests of the directors

As at the date of this Notice of Meeting and Explanatory Statement, the New Directors hold interests in the Shares of the Company as detailed in the table below:

New Director	Number of fully paid Existing Shares held directly and indirectly	Number of fully paid New Shares proposed to be issued


Perryman Leach	16,007,501	NIL
Suresh Emmanuel Abishegam	1,293,816	NIL
Paul Price	-	8,000,000 (indirectly Trident Capital) plus 2,000,000 (Resolution 6)
Richard Soo	-	2,000,000 (Resolution 3) plus 2,000,000 (Resolution 6)

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KC Ong	-	2,000,000 (Resolution 3) plus 2,000,000 (Resolution 6)
TOTAL	17,301,317	18,000,000

No New Director is an Associate of any other New Director.

Except as otherwise disclosed in this Notice of Meeting and Explanatory Statement, the New Directors have no interest in the outcome of the Resolutions (except for Resolution 3 in the case of Paul Price, KC Ong and Richard Soo and Resolution 6 in the case of Paul Price, Richard Soo and KC Ong).

4.6 Recommendation by directors

The Directors (except Paul Price KC Ong and Richard Soo in respect of Resolution 3 in which he has material personal interest) recommend that, in the context of the Company's current circumstances, and given the Creditors’ approval of the Recapitalisation Proposal, Shareholders accept the Recapitalisation Proposal and approve Resolutions 1 to 5 to be put to the General Meeting. However, Shareholders must decide for themselves how to vote based on the matters set out in the Explanatory Statement.

Each of Paul Price, Richard Soo and KC Ong expresses no opinion and makes no recommendation in respect of Resolution 6, being the right of those Directors to apply for up to 2,000,000 New Shares under the Prospectus. This is due to each of Paul Price, Richard Soo and KC Ong having a material personal interest in the outcome of Resolution 6.

4.7 Taxation

The Recapitalisation Proposal may give rise to income tax implications for the Company.

Shareholders are advised to seek their own taxation advice on the effect of the Resolutions on their personal position. Neither the Company, the Directors, the Administrators or any advisers to the Company accept any responsibility for any individual Shareholder's taxation consequences on any aspect of the Recapitalisation Proposal.

4.8 Effect of the Recapitalisation Proposal

For the purposes of this Explanatory Statement, the information below is provided for the consideration of Shareholders.

The Company’s shares were last traded on the ASX on 30 September 2012 and the Administrators were appointed as administrators of the Company on 19 November 2012. Accordingly, historic ASX share trading prices for the

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Company are not considered a reliable basis to assess the value of the New Shares.

Due to the Company’s current state of affairs, the lack of profit history and the immediate lack of a reliable future cash flow from remaining assets, maintainable earnings are not considered a reliable basis to assess the value of the Company’s Shares.

The Deed Administrators estimate that, on a liquidation basis, there is a deficiency of funds and the Creditors may receive a nil return if the Recapitalisation Proposal does not proceed. Therefore, on a liquidation basis, the Shareholders’ return from the Company is most likely to be nil.

Accordingly, the current implicit value of the Existing Shares at the date of this Explanatory Statement is nil.

The advantages of passing the Resolutions and subsequent completion of the Recapitalisation Proposal include the following:

(a) A cash injection of $1,920,000.
(b) The provable debts of the Company to the Creditors being forgiven. This will leave the Company with negligible liabilities, compared with the current position under which the Company is in a net liability position.
(c) The Company’s ability to seek re-quotation of its Shares on ASX being enhanced. By obtaining reinstatement to trading of the Company’s Shares, Shareholders are offered liquidity to sell their post-Capital Consolidation shareholdings on the ASX.

The principal disadvantage of the Recapitalisation Proposal to Shareholders is that their holdings in the Company will be diluted as follows:

(a) the Capital Consolidation on a 1 for 10 basis pursuant to Resolution 1; and
(b) the issue of New Shares pursuant to Resolutions 3, 4 and 5.

However, this must be balanced with the fact that Existing Shares currently have nil value and, should the Recapitalisation Proposal not proceed, the Company is most likely to be placed into liquidation. Following completion of the Recapitalisation Proposal, the existing Shareholders’ reduced holdings will have value based on the cash injection to the Company and the return to liquidity through re-quotation on the ASX.

4.9 Indicative value of New Shares

The quantum of benefit to be received by the holders of the New Shares proposed to be issued pursuant to Resolutions 3, 4, 5 and 6 will depend in part on the price at which the underlying New Shares may trade on the ASX.

As the Company is currently suspended from the ASX, there is no readily available market price for the Shares. The “net assets on a going concern” basis is usually appropriate where the majority of assets consist of cash,

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passive investments or projects with a limited life. All assets and liabilities of the Company are valued at market value under this alternative and this combined market value forms the basis for the Company’s valuation.

Accordingly, as the Company is likely to be in a position to continue trading following the Recapitalisation Proposal, the Company considers the net assets on a going concern basis to be the most appropriate methodology for valuing Shares in the Company following the Recapitalisation Proposal.

Based on the pro forma Statement of Financial Position set out in Section 2.8 (which assumes the completion of the Recapitalisation Proposal) the estimated value of the net assets of the Company after the Recapitalisation Proposal is equivalent to approximately 0.67 cents per Share.

4.10 Appointment of New Directors

Pursuant to the terms of the Reconstruction Deed, the Deed Administrators have procured the resignations of the secretary of the Company and Trident Capital Pty Ltd has procured the appointment of 3 new directors and a Company secretary, being:

(a) Paul Price (Director);
(b) Richard Soo (Director);
(c) KC Ong (Director); and
(d) Deborah Ho (Company Secretary).

5 REGULATORY REQUIREMENTS

The General Meeting has been called to approve specific aspects of the Recapitalisation Proposal in accordance with the Listing Rules and the Corporations Act which are summarised below.

5.1 Section 254H of the Corporations Act and Listing Rule 7.20

In Resolution 1, the Company proposes to consolidate its existing issued capital on a 1 for 10 basis.

Under section 254H of the Corporations Act, a Company may convert any or all of its shares into a larger or smaller number of shares by resolution passed at a general meeting of the Company.

Listing Rule 7.20 requires the following information to be provided to shareholders:

(a) The Capital Consolidation will consolidate the securities in the Company on a 1 for 10 basis (refer to Section 2.6).
(b) Any fractional entitlements as a result of the Capital Consolidation will be rounded down.

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If Resolution 1 is passed, the Capital Consolidation is to take effect 6 Business days after the date of the General Meeting, in accordance with Appendix 7A to the Listing Rules.

5.2 Sections 256B, 256C and 258F of the Corporations Act

In Resolution 2, the Company proposes to reduce its share capital by applying an amount of up to approximately $19,872,740 being a proportion of the accumulated losses of the Company, against the share capital of the Company which is considered permanently lost.

Sections 256B and 256C of the Corporations Act require a reduction of capital of this nature to be approved by an ordinary resolution passed at a general meeting of the Company.

Section 258F of the Corporations Act permits the Company to reduce its share capital by cancelling any paid-up share capital that is lost or is not represented by available assets, provided that:

(a) the Company does not cancel Shares; and
(b) the cancellation of paid-up share capital is not inconsistent with the requirements of any accounting standard.

5.3 Listing Rule 7.1

Listing Rule 7.1 provides that a Company must not, without Shareholder approval and subject to certain exceptions, issue any equity security during any 12 month period if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

The maximum number of securities that may be issued under resolutions 3, 4 and 5 is 350,000,000 New Shares.

As the proposed issue of New Shares under Resolution 3, 4 and 5 will result in an issue of more than 15% of the Company’s share capital in a 12 month period, Shareholder approval is required pursuant to Listing Rule 7.1 to issue the New Shares under those resolutions.

All of the New Shares will, upon being issued, rank equally in all respects with the Existing Shares in the Company (post-Capital Consolidation).

Listing Rule 7.3 requires the following information to be provided to shareholders:

(a) Resolution 4 – Issue of New Shares to Non-Related Parties

(i) The maximum number of securities to be issued to the NonRelated Parties under Resolution 4 is 80,000,000 New Shares.
(ii) The New Shares will be allotted and issued under Resolution 4 within 3 months of the General Meeting. Allotment will occur on the same date as the allottees have already been identified.

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(iii) The issue price payable for the New Shares under Resolution 4 is 0.5 cents per New Share.
(iv) The allottees under Resolution 4 are:
(A) 12,000,000 New Shares to John Clinton (as an Exempt Investor) (and/or his nominee);
(B) 4,000,000 New Shares to Teo Family (as an Exempt Investor) (and/or its nominee);
(C) 10,000,000 New Shares to RZ Capital Pte Ltd (as an Exempt Investor) (and/or its nominee);
(D) 10,000,000 New Shares to Precise Network Limited (as an Exempt Investor) (and/or its nominee);
(E) 4,000,000 New Shares to Peng Jin (as an Exempt Investor) (and/or his nominee);
(F) 2,000,000 New Shares to Bai Zhi Yuan (as an Exempt Investor) (and/or his nominee);
(G) 2,000,000 New Shares to Wang Min Jian (as an Exempt Investor) (and/or his nominee);
(H) 12,000,000 New Shares to Chen Fei (as an Exempt Investor) (and/or his nominee);
(I) 10,000,000 New Shares to Chan Ho Yin (as an Exempt Investor) (and/or his nominee;
(J) 12,000,000 New Shares to Chen Ying Hua (as an Exempt Investor) (and/or his nominee); and
(K) 2,000,000 New Shares to Ang Siok Kooi (as an Exempt Investor) (and/or his nominee).

None of the allottees under Resolution 4 are Related Parties of the Company.

(v) The New Shares to be issued under Resolution 4 are ordinary fully paid shares which, upon being issued, will rank equally with the Existing Shares in the Company (post-Capital Consolidation).
(vi) The issue of New Shares under resolution 4 will raise $400,000 which will be used for the purposes specified in Section 3.6.

(b) Resolution 5 – Issue of New Shares under the Prospectus

(i) The maximum number of securities to be issued under Resolution 5 is 250,000,000 New Shares.

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(ii) The New Shares will be allotted and issued under resolution 5 within 3 months of the General Meeting. Allotment will occur either at once on the same date or progressively as and when allotteees are identified but in any event will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by an ASX waiver or modification of the Listing Rules).
(iii) The issue price of the securities to be issued under Resolution 5 is 1 cent per New Share.
(iv) The allottees have not yet been identified but will be determined at the sole discretion of the Company from the applications under the Prospectus. Some allottees may be Related Parties or Associates of the Company. Allotment will occur progressively as and when allottees are identified.
(v) The New Shares to be allotted and issued under Resolution 5 are ordinary fully paid shares which, upon being issued, will rank equally with the Existing Shares in the Company (postCapital Consolidation.
(vi) The issue of New Shares under Resolution 5 will raise up to $2,500,000 which will be used for the purposes specified in Section 3.7.

5.4 Section 208 of the Corporations Act

Under Chapter 2E of the Corporations Act, a public company cannot give a financial benefit (including an issue of shares) to a Related Party of the Company without Shareholder approval (unless one of the exceptions set out in sections 210 to 216 of the Corporations Act applies).

Under section 228 of the Corporations Act, a director of a public company is a Related Party of the Company.

The Company has determined to seek Shareholder approval under section 208 of the Corporations Act to permit:

(a) the issue of New Shares on the terms set out in Resolution 3 to Trident Capital Pty Ltd, KC Ong and Richard Soo and their Nominees; and
(b) the issue of New Shares under the Prospectus on the terms set out in Resolution 6 to the New Directors, Messrs Price, Soo and Ong as Related Parties of the Company.

Section 219 of the Corporations Act requires that the following information be provided to Shareholders for approval to be granted under section 208 of the Corporations Act:

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(a) Resolution 3 – Issue of New Shares to Trident, Ong and Soo and their Nominees

(i) The Related Party to whom Resolution 3 would permit financial benefits is Trident Capital Pty Ltd, KC Ong and Richard Soo.
(ii) The financial benefit that the Related Parties will receive if Resolution 3 is passed is the issue of 20,000,000 New Shares to the value of $100,000 in accordance with the terms in 3.5.
(iii) Perry Leach and Suresh Abishegam recommend that Shareholders vote in favour of Resolution 3 in order to give effect to the Recapitalisation Proposal. Paul Price declines to make a recommendation in respect of Resolution 3 as he has a material interest in the outcome of Resolution 3 as he is a director of Trident Capital Pty Ltd. Richard Soo and KC Ong also decline to make recommendations in respect of Resolution 3 as they also have a material interest in the outcome of Resolution 3.
(iv) The New Shares will be allotted and issued under Resolution 3 within 3 months of the General Meeting in accordance with ASX Waiver (or such later date to the extent permitted by any additional ASX waiver or modification of the Listing Rules) to Trident, KC Ong Richard Soo and their Nominees.
(v) The New Shares to be issued under Resolution 3 are ordinary fully paid shares, which upon being issued, will rank equally with the Existing Shares in the Company (post-Capital Consolidation).
(vi) The issue of new Shares under Resolution 3 will raise $100,000 which will be used for the purposes specified in Section 3.5.
(vii) Please refer to Section 4.9 for a description of the indicative value of the New Shares.
(viii) At the date of this Notice of Meeting and Explanatory Statement, Trident Capital Pty Ltd, KC Ong and Richard Soo does not hold any Shares.
(ix) Trident Capital Pty Ltd has acted as the proponent of the Recapitalisation Proposal. KC Ong and Richard Soo have recently been appointed directors of the Company.
(x) Other than as set out on this explanatory statement, there is no further information which Shareholders would reasonably require in order to decide whether or not it is in the Company’s best interests to pass Resolution 3.

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(b) Resolution 6 – Right to apply under the Prospectus by New Directors

(i) The Related Parties to whom Resolution 6 would permit financial benefits are the New Directors, being:
(A) Paul Price;
(B) Richard Soo; and
(C) KC Ong.
(ii) The financial benefit that the New Directors will receive if Resolution 6 is passed is the issue of up to 2,000,000 New Shares from the total Issue of New Shares under the Prospectus in Resolution 6 at an issue price of 1 cent each and otherwise in accordance with the terms set out in Section 3.8.
(iii) Paul Price, Richard Soo and KC Ong decline in making a recommendation in respect of Resolution 6, as they have a material personal interest in the outcome of Resolution 6.
(iv) As disclosed previously, Paul Price, Richard Soo and KC Ong each have a material personal interest in the outcome of Resolution 6 as they will have the right to apply for New Shares under the Prospectus if Resolution 6 is passed.
(v) The New Directors will be paid directors’ fees by the Company as follows:
(A) $60,000 per year to Paul Price (Chairman);
(B) $48,000 per year to Richard Soo; and
(C) $48,000 per year to KC Ong.
(vi) Based on the issue price of the New Shares under the Prospectus being 1 cent, the maximum value of the 6,000,000 New Shares which may be issued to the New Directors is approximately $60,000 ($20,000 each). Each New Director must pay $20,000 to the Company if he decides to apply for the full 2,000,000 New Shares available to him under the Prospectus.
(vii) Assuming that all Resolutions are approved, the dilutionary effect that the issue of the New Shares to the New Directors will have on Shareholders is outlined in the table at Section 2.6.
(viii) Other than as set out in this Explanatory Statement, there is no further information which Shareholders would reasonably require in order to decide whether or not it is in the Company’s best interests to pass Resolution 6.

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5.5 Listing Rule 10.11

Chapter 10 of the Listing Rules contains certain provisions in relation to transactions between a company and “persons in a position of influence”. Listing Rule 10.11 provides that a company must not issue equity securities to a Related Party without the approval of Shareholders by ordinary resolution.

The term Related Party is defined for these purposes to include a Related Party within the meaning of section 228 of the Corporations Act and a person whose relationship with the entity or a Related Party is, in ASX’s opinion, such that approval should be obtained.

Pursuant to Listing Rule 7.2, if Shareholder approval is being sought pursuant to Listing Rule 10.11, approval under Listing Rule 7.1 is not required.

Accordingly, the Company is seeking Shareholder approval under Listing Rule 10.11 to permit the issue of New Shares to Related Parties under Resolutions 3, 5 and 6.

The following information is provided to Shareholders for the purposes of Listing Rule 10.11:

(a) Resolution 3 – Issue of New Shares to Trident, Ong and Soo and their Nominees

Paul Price is a Related Party of the Company for the purposes of Listing Rule 10.11 by virtue of being a director of the Company and Trident Capital Pty Ltd. Accordingly, Shareholder approval is being sought under Listing Rule 10.11 for the issue of New Shares to Trident Capital Pty Ltd under Resolution 3.

Following the approval of the issue of 20,000,000 New Shares to Trident Capital Pty Ltd, KC Ong and Richard Soo and/or their nominees under Resolution 3, the Company will still have the capacity to issue 15% of its expended Share capital over the next 12 months as those New Shares, once issued, will be excluded from the calculation under Listing Rule 7.1.

KC Ong is a related party of the Company for the purposes of listing Rule 10.11 by virtue of being a director of the Company. Accordingly, Shareholder approval is being sought under Listing Rule 10.4 for the issue of New Shares to KC Ong under Resolution 3.

Richard Soo is a related party of the Company for the purposes of listing Rule 10.11 by virtue of being a director of the Company. Accordingly, Shareholder approval is being sought under Listing Rule 10.4 for the issue of New Shares to Richard Soo under Resolution 3.

Listing Rule 10.13 requires the following information to be provided to Shareholders for the purposes of Listing Rule 10.11 in respect of Resolution 3:

(i) The Related Parties to whom New Shares are to be allotted and issued under Resolution 3 is Trident Capital Pty Ltd, of which Paul Price is a director, KC Ong and Richard Soo.

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(ii) The maximum number of securities to be issued under Resolution 3 is 20,000,000 New Shares, issued as follows:
(A) Trident Capital Pty Ltd 16,000,000 New Shares;
(B) KC Ong 2,000,000 New Shares; and
(C) Richard Soo 2,000,000 New Shares.
(iii) The New Shares to be allotted and issued under Resolution 3 will be allotted and issued within 3 months of the General Meeting (or such later time to the extent permitted by ASX under any additional waiver of the Listing Rules) to Trident, KC Ong and Richard Soo and their Nominees.
(iv) The issue price payable for the New Shares under Resolution 3 is 0.5 cents per New Share.
(v) The New Shares to be issued under Resolution 3 are ordinary fully paid shares which, upon being issued, will rank equally with the Existing Shares in the Company (post-Capital Consolidation) and, therefore, will be on the same terms as the New Shares to be issued to non-Related Parties under the Prospectus.
(vi) The amount of $100,000 will be raised by the issue of New Shares under Resolution 3 and the Company intends to use the funds for the purposes specified in Section 3.5.

(b) Resolution 6 – Right to apply under the Prospectus by New Directors

Paul Price, Richard Soo and KC Ong are all directors of the Company and are therefore Related Parties of the Company for the purposes of Listing Rule 10.11. Accordingly, Shareholder approval is being sought under Listing Rule 10.11 for the issue of New Shares to Paul Price, Richard Soo and KC Ong under Resolution 6.

Following the approval under Resolution 6 of the issue of up to 6,000,000 New Shares to each of Paul Price, Richard Soo and KC Ong (and/or their nominees) from the total of 250,000,000 New Shares under the Prospectus, the Company will still have the capacity to issue 15% of its expended Share capital over the next 12 months as those New Shares, once issued, will be excluded from the calculation under Listing Rule 7.1.

Listing Rule 10.13 requires the following information to be provided to Shareholders for the purposes of Listing Rule 10.11 in respect of Resolution 6:

(i) The Related Parties to whom New Shares are to be allotted and issued under Resolution 6 are Paul Price, Richard Soo and KC Ong (and/or their nominees):
(A) Paul Price 2,000,000 New Shares;

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(B) KC Ong 2,000,000 New Shares; and
(C) Richard Soo 2,000,000 New Shares.
(ii) The maximum number of securities to be issued under Resolution 6 is 6,000,000 New Shares.
(iii) The New Shares to be allotted and issued under Resolution 6 will be allotted and issued within 1 months of the General Meeting (or such later time to the extent permitted by ASX under any additional waiver of the Listing Rules).
(iv) The New Shares will be issued to the New Directors (and/or their nominees) under the Prospectus at a price of 1 cent per New Share and otherwise on the terms set out in Section 3.7.
(v) The New Shares to be allotted and issued under the Prospectus are ordinary fully paid shares which, upon being issued, will rank equally with the Existing Shares in the Company (post-Capital Consolidation) and, therefore, will be on the same terms as the New Shares to be issued to nonRelated Parties under the Prospectus.
(vi) Up to $60,000 (as part of the $2,500,000 to be raised under the Prospectus) will be raised by the issue of New Shares under Resolution 6 and the Company intends to use the funds for the purposes specified in Section 3.7.

5.6 ASIC and ASX’s role

Under section 218(1) of the Corporations Act, the Company must lodge the Notice of Meeting and Explanatory Statement with ASIC at least 14 days before the notice convening a general meeting is given.

The fact that the Notice of Meeting, Explanatory Statement and any other relevant documentation is received by ASIC and ASX is not to be taken as an indication of the merits of the Recapitalisation Proposal or the Company. ASIC, ASX and their respective officers do not take any responsibility for any decision a Shareholder may make in reliance on any of that documentation.

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6 DEFINITIONS

In this Explanatory Statement:

Administrators means David Hurt and Chris Williamson of WA Insolvency Solutions of Level 10, 111 St Georges Terrace, Perth, Western Australia 6000 in their capacity as administrators of the Company.

ASIC means the Australian Securities and Investments Commission.

Assets means all of the assets of the Company.

Associate has the meaning given in sections 11 to 17 of the Corporations Act.

ASX means ASX Limited ACN 008 624 691 or the Australian Securities Exchange, as the context requires.

ASX Waiver means the waiver in respect of Listing Rule 10.13.3 granted by the ASX in favour of the Company extending the time which the Company may issue New Shares to Trident Capital Pty Ltd and the New Directors (as Related Parties) from 1 month from the date of the General Meeting to 3 months from the date of the General Meeting, the terms of which were published on the ASX platform on 7 May 2013.

Business Day means a day on which banks are open for business in Perth, Western Australia excluding a Saturday, Sunday or public holiday.

Capital Consolidation means the consolidation of the existing issued capital of the Company on a 1 for 10 basis as described in Section 3.3.

Claim means a debt payable by, or a claim against, the Company (present or future, certain or contingent, ascertained or sounding only in damages) being debts or claims the circumstances giving rise to which occurred on or before 19 November 2012 that would be admissible to proof against the Company in accordance with Division 6 of Part 5.6 of the Corporations Act, if the Company had been wound up and the winding up is taken to have commenced on 19 November 2012.

Company means Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Creditor means any person having a Claim against the Company that has been accepted by the Administrators.

Creditors’ Trust Deed means the Creditors’ trust deed to be entered into by the Trustees and the Company as summarised in Section 4.3.

Deed Administrators means David Hurt and Chris Williamson of WA Insolvency Solutions of Level 10, 111 St Georges Terrace, Perth, Western Australia 6000 in their capacity as administrators of the DOCA.

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DOCA means the deed of company arrangement dated 26 February 2013 between the Deed Administrators and the Company as summarised in Section 4.2.

Existing Directors means the directors of the Company as at the date of this Notice of Meeting and Explanatory Statement, being:

(a) Perryman Leach;
(b) Suresh Abishegam;
(c) Paul Price;
(d) KC Ong; and
(e) Richard Soo.

Existing Shares means the 241,154,294 fully paid ordinary shares in the Company on issue immediately prior to the Capital Consolidation.

Explanatory Statement means this Explanatory Statement accompanying the Notice of Meeting.

General Meeting means the general meeting of Shareholders convened for the purposes of considering the Resolutions.

Listing Rules means the ASX Listing Rules published and distributed by the ASX.

New Directors means Paul Price, Richard Soo and KC Ong.

New Share means a Share issued after the Capital Consolidation.

Notice of Meeting means the notice convening the General Meeting accompanying this Explanatory Statement.

Official List means the official list of the ASX.

Prospectus means the prospectus to be issued by the Company to raise up to $2,500,000 by the issue of 250,000,000 New Shares at an issue price of $0.01.

Proxy Form means the proxy form accompanying the Notice of Meeting.

Recapitalisation Proposal means the proposal for the recapitalisation of the Company as described in Section 2 .

Reconstruction Deed means the reconstruction deed dated 26 February 2013 between the Administrators, the Company and Trident Capital Pty Ltd in relation to the Recapitalisation Proposal.

Record Date means the date that is 6 Business Days from the date of the General Meeting being the date on which the Existing Shares will be consolidated pursuant to the Capital Consolidation.

Related Party has the meaning given in section 228 of the Corporations Act.

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Resolution means a resolution in the Notice of Meeting and which is to be considered at the General Meeting.

Section means a section of this Explanatory Statement.

Share means a fully paid ordinary share in the Company and includes any New Share.

Shareholder means a shareholder of the Company.

Trustees means David Hurt and Chris Williamson of WA Insolvency solutions of Level 10, 111 St Georges Terrace, Perth, Western Australia 6000 in their capacity as trustees of the Trust Fund.

WST means Western Standard Time in Australia.

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Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement)

Proxy Form

I/We

being a member of Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement) entitled to attend and vote at the General Meeting, hereby

appoint Name of proxy OR the Chairman of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chairman of the General Meeting, or the Chairman’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the General Meeting to be held at 10.00am (WST) on day, 18 June 2013 at the offices of Price Sierakowski Corporate of Level 24, 44 St Georges Terrace, Perth, Western Australia, and at any adjournment thereof.

If no directions are given, the Chairman will vote in favour of all the Resolutions in which the Chairman is entitled to vote undirected proxies.

OR

Voting on business of the General Meeting	Voting on business of the General Meeting	FOR	AGAINST	ABSTAIN
Resolution 1	Consolidation of Capital
Resolution 2	Reduction of Capital
Resolution 3	Issue of New Shares to Trident, Ong and Soo and their Nominees
Resolution 4	Issue of New Shares to Non-Related Parties
Resolution 5	Issue of New Shares under the Prospectus
Resolution 6	Right to apply under the Prospectus by New Directors

Please note: If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority.

If two proxies are being appointed, the proportion of voting rights this proxy represents is ___%

Signature of Member(s): Individual or Member 1 Sole Director/Company Secretary Contact Name: ______	Date:_____ Member 2 Member 3 Director Director/Company Secretary ____ Contact Ph (daytime): ____	Date:_____ Member 3

Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement)

Instructions for completing the Proxy Form

1 Your name and address

Please print your name and address as it appears on your holding statement and the Company’s share register. If Shares are jointly held, please ensure the name and address of each joint shareholder is indicated. Shareholders should advise the Company of any changes. Shareholders sponsored by a broker should advise their broker of any changes. Please note you cannot change ownership of your securities using this form.

2 Appointment of a proxy

You are entitled to appoint no more than two proxies to attend and vote on a poll on your behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of your voting rights. If you appoint two proxies and the appointment does not specify this proportion, each proxy may exercise half of your votes.

If you wish to appoint the Chairman of the General Meeting as your proxy, please mark the box. If you leave this section blank or your named proxy does not attend the General Meeting, the Chairman of the General Meeting will be your proxy. A proxy need not be a shareholder of the Company.

3 Direction to vote

You may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item your vote will be invalid on that item.

4 Signing Instructions

You must sign the Proxy Form in the spaces provided in accordance with the following:

Individual: Where the holding is in one name, the holder must sign.
Joint holding:
Where the holding is in more than one name, all of the shareholders should sign.
Power of attorney: If you have not already lodged the power of attorney with the Company’s share registry, please attach a certified photocopy of the power of attorney to the Proxy Form when you return it.
Companies:
Where the company has a sole director who is also the sole company secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, the Proxy Form must be signed by a director jointly with either another director or a company secretary. Please indicate the office held by signing in the appropriate place.

If a representative of the corporation is to attend the General Meeting a “Certificate of Appointment of Corporate Representative” should be produced prior to admission.

5 Return of the Proxy Form

To vote by proxy, please complete and sign the enclosed Proxy Form (and any power of attorney and/or second Proxy Form) and return by:

mail to Trident Capital at PO Box Z5183, St Georges Terrace, Perth, Western Australia 6831; or
facsimile to the Company on facsimile number +61 8 9218 8875,

so that it is received by no later than 5.00pm (WST) on Thursday, 13 June 2013.

Proxy Forms received later than this time will be invalid.

AI assistant

CAQ HOLDINGS LIMITED — Proxy Solicitation & Information Statement 2013

64604_rns_2013-05-19_b4fba48e-6ed4-4e18-be63-ee339ec08bee.pdf

Cell Aquaculture Limited ACN 091 687 740 (Subject to a Deed of Company Arrangement)

NOTICE OF GENERAL MEETING AND EXPLANATORY STATEMENT

Important Notice

Recapitalisation Proposal of Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement)

General Information

In considering the Resolutions, Shareholders must bear in mind the current financial circumstances of the Company.

NOTICE OF GENERAL MEETING

SPECIAL BUSINESS

1. Consolidation of Capital

2. Reduction of Capital

3. Issue of New Shares to Trident and its Nominees

4. Issue of New Shares to Non-Related Parties

5. Issue of New Shares under the Prospectus

6. Right to apply under the Prospectus by New Directors

Voting exclusion statement

Explanatory Statement

Proxies

Voting Entitlements

By Order of the Board of Directors

Explanatory Statement to Shareholders

Proposal for the Recapitalisation of Cell Aquaculture Limited ACN 091 687 740 (Subject to Deed of Company Arrangement)

IMPORTANT NOTICE

Shareholders should read this Explanatory Statement in full and if they have any questions, obtain professional advice before making any decisions in relation to the Resolutions to be put to Shareholders at the General Meeting.

CONTENTS

Explanatory Statement

1 INTRODUCTION

2 THE RECAPITALISATION PROPOSAL

2.1 Background

2.2 Principal features of the Recapitalisation Proposal

2.3 Purpose of the Recapitalisation Proposal

2.4 Indicative timetable

2.5 Operational and expenditure plans of the Company

(a) Capital raising

(b) Expenditure plans and use of funds

Note :

2.6 Pro forma capital structure

Notes

2.7 Quotation of New Shares on ASX

2.8 Pro forma Statement of Financial Position

Notes

1. Cash and Cash Equivalents

2. Shares on issue

2.9 Forgiveness of Creditors’ Claims

3 GENERAL MEETING

3.1 Action to be Taken by the Existing Shareholders

3.2 General Meeting Resolutions

3.3 Resolution 1 – Capital Consolidation

(a) Shares

(b) Timetable for Capital Consolidation

Notes

3.4 Resolution 2 – Reduction of capital

3.5 Resolution 3 – Issue of New Shares to Trident, Ong and Soo and their Nominees

3.6 Resolution 4 – Issue of New Shares to Non-Related Parties

3.7 Resolution 5 – Issue of New Shares under the Prospectus

3.8 Resolution 6 – Right to apply under the Prospectus by the New Directors

4

OTHER INFORMATION

4.1 Scope of disclosure

4.2 Deed of Company Arrangement

4.3 Creditors’ Trust Deed

4.4 Future Investments

4.5

Voting interests of the directors

4.6 Recommendation by directors

4.7 Taxation

4.8 Effect of the Recapitalisation Proposal

4.9 Indicative value of New Shares

4.10 Appointment of New Directors

5

REGULATORY REQUIREMENTS

5.1

Section 254H of the Corporations Act and Listing Rule 7.20

5.2 Sections 256B, 256C and 258F of the Corporations Act

5.3 Listing Rule 7.1

(a) Resolution 4 – Issue of New Shares to Non-Related Parties

(b) Resolution 5 – Issue of New Shares under the Prospectus

5.4 Section 208 of the Corporations Act

CAQ HOLDINGS LIMITED Proxy Solicitation & Information Statement 2013